A cracked steam drum is an awkward character in a story about the future of flying. In 2023, Montana Renewables found a leak in the steam recovery system at its renewable hydrogen plant. After opening the unit, it chose replacement over repair. Production slowed. A scheduled maintenance shutdown moved forward. The ambitious business of making renewable fuel had encountered a very ordinary industrial problem: something essential had broken.
- Calumet supplies the ingredients behind everyday products, plus brands including Royal Purple and TruFuel.
- Montana Renewables turns renewable feedstocks into transport fuels.
- Its revised aviation-fuel expansion depends on reusing nearby equipment and spending in stages.
The parent company, Calumet, is well suited to this kind of story. Its work happens somewhere between the thing people recognize and the machinery that makes it possible. Think lipstick, engine oil, a candle, a lawnmower. Calumet supplies ingredients or finished products in each of those worlds. The business rewards a particular habit of mind: paying attention to what a material actually does.
01 / The business inside the product
Take lip gloss. Color gets the attention, but texture does much of the work. Calumet’s Penreco business sells Versagel, a system for thickening and gelling ingredients, with different viscosity ranges for formulators. Its applications include cosmetics, skin care and pharmaceuticals. The customer is often another manufacturer, trying to make a product feel, spread or hold together in a particular way.
Across the wider catalogue sit base oils, solvents, waxes and esters. These are materials for other people’s recipes: lubricants, inks, coatings and personal-care products. A buyer can work with Calumet on a formulation rather than starting from an anonymous drum and hoping for the best. Specifications and technical support matter because an ingredient’s job continues long after it leaves the supplier.
Then there are the products with names shoppers recognize. Royal Purple sells synthetic lubricants for automotive, commercial and racing uses. Bel-Ray serves applications ranging from powersports to mining. TruFuel offers ethanol-free fuel for outdoor power equipment, including ready-mixed two-cycle versions. The convenience is easy to understand if you have ever stood over a fuel can doing arithmetic.
This is a manufacturer with several routes to market. It sells bulk ingredients to businesses, packaged products through commercial and retail channels, and renewable fuels through offtake agreements. Its competitors change with the shelf: Ergon in naphthenic oils, ExxonMobil in several categories, Mobil 1 and Valvoline in packaged lubricants. Calumet’s distinguishing feature is the combination of specialist ingredients, formulation work and recognizable brands.
02 / Small niches, substantial machinery
The logic predates the renewable-fuel business. In Calumet’s 2014 annual report, co-founder Bill Grube described a strategy of acquiring specialty businesses whose volumes or complexity made them less attractive to larger integrated energy companies. Grube and Fred Fehsenfeld Jr. established the modern company in 1990, building on older refining roots. The proposition was unusually concrete: find demanding corners of a large industry and learn their details.
“unleash the ingenuity of our engineering and operational teams”Todd Borgmann, CEO · September 2026
That history helps explain why renewable aviation fuel belongs here. Montana Renewables processes feedstocks including tallow, used cooking oil and seed oils into fuels. It began operations in late 2022. Shell deliveries followed in 2023, opening a route to aviation customers through an established distributor. Chemistry alone would not get the product onto an aircraft; blending, logistics and purchasing agreements also had to work.
The network has expanded. A February 2026 agreement with World Energy covers more than 70 million gallons of SAF over three years. In August, Montana Renewables announced supply of up to 30 million gallons of neat SAF annually to the Minnesota SAF Hub through its Shell arrangement. Those are distinct agreements and stated volumes, not a measurement of fuel already delivered.
03 / Look over the fence
In September 2026, Calumet changed its expansion plan. Selected equipment at the adjacent Calumet Montana Refining facility would be repurposed for Montana Renewables. The company now estimated $137 million in remaining expansion capital, compared with $1.2 billion contemplated for the original Phase 2. These are different project scopes, and neither figure represents the site’s total historical cost.
September 2026 plans. Scope changed; this is not a like-for-like construction cost comparison.
The revised target is roughly 200 million gallons of annual SAF capacity by the end of 2028. The engineering plan uses a hydrotreater, hydrogen plant and naphtha splitter already nearby, with work divided into six projects. Calumet expects retained earnings to help fund the work. On September 14, Montana Renewables received the final $34 million draw under its amended DOE loan agreement.
The lesson an operator can borrow is straightforward: inventory the capabilities already on site before authorizing new construction. Then divide the work into steps whose performance can be checked. This approach needs compatible equipment, useful shared infrastructure and time to connect everything. A business without those advantages cannot copy the capital estimate by copying the ambition.
04 / The drum still matters
Calumet’s numbers keep the engineering story honest. Second-quarter 2026 results showed a $95.9 million net loss alongside $175.2 million of adjusted EBITDA with Tax Attributes. The latter is a non-GAAP measure, not net profit. Renewable-fuel economics also depend on feedstock prices, policy incentives and margins. A functioning plant can still face a difficult market.
On October 15, Calumet announced a further $150 million debt redemption, scheduled for October 25. The company is trying to expand while reducing financing costs. Whether that balance holds will depend on execution as much as design. The steam drum offers the right closing image: the future arrives through equipment that must work, shift after shift.